House falls vote short of approving public subsidy for private K-12 education

The House of Representatives today fell one vote short of the 75 needed to approve a treasurer's office appropriation that included an amendment to allow tax deductions for money directed to K-12 private school tuition, essentially a voucher program in support of private education.

The vote was 74-15 with five voting present, the equivalent of a no vote. Six representatives were not recorded as voting.

That leaves the treasurer's office budget hanging. It can be voted again.

House Speaker Jeremy Gillam spoke for the bill, which got only 56 votes Tuesday, needing 75, to pass.

The amendment was added outside the normal order of a budget session. It was intended to bring to Arkansas a change in federal law for 529 savings plans for higher education to allow money to be withdrawn from those accounts for K-12 private education as well. A big difference was added in Arkansas. A couple filing separately on the same return an get a tax deduction for putting $10,000 a year into the savings plans. The federal program allows K-12 withdrawals but gives no deduction for contributions. Earnings on the money are tax-exempt.

Gillam urged passage of the bill because it funds an essential part of the government, the treasurer's office. He declared the amendment was on the bill and no longer the issue. He acknowledged some representatives were getting pressure against the amendment, sponsored by Sen. Jason Rapert. It will cost the state an estimated $5.2 million in lost state revenue annually that will go instead to private school tuition, essentially a shell game voucher plan and public subsidy of private education.

Gillam said a vote for the bill was required to demonstrate the House was serious about efficient government. In response to a question from Rep. Charles Blake, Gillam said the Rapert amendment could be removed. But he said there were not enough votes to pass the bill without it.He told Blake he could try to make changes in 2019.

"The right thing to do today is vote for this bill," Gillam said.

Blake pressed Gillam, asking if he'd support a "clean" treasurer's bill, without the amendment, Gillam dodged the question. He said the House should be consistent and not hold bills hostage because of elements it doesn't like.

Rep. Kim Hendren opposed the bill. He said he had questions about whether the bill primarily helped rich taxpayers and wondered if the measure would take money from public schools where children of lower income people attend. He said he wasn't in favor of cutting taxes more for the "fat cats."

Asked about the process of how the amendment was added in a special language committee, Hendren agreed and said the fiscal session in general was no way to run the government.

Rep. Jana Della Rosa voted noTuesday, but supported the bill today. She said she'd have preferred a separate vote on the program. But she said she was persuaded by the treasurer's office the bill was to make the state program consistent with the federal program. And she said the change was for only one year and would have to be revisited in a regular session. She noted that the law doesn't currently allow spending of the money on K-12 as federal law does and Arkansas taxpayers could get a penalty if they did that. But she didn't mention that the Arkansas amendment gives more tax benefits than the federal law gives.

Della Rosa argued it would eliminate confusion to "align" Arkansas law with federal law on 529s. But there are innumerable areas of tax law where state and federal law do not align.

Della Rosa also claimed money in the accounts are "post-tax." That's not true as to the part for which they've received $10,000 deductions per year.

Rep. Mary Bentley said the program would help parents send children to Christian schools. Rep. Bob Ballinger rose to say the bill wasn't about school choice, but about funding the treasurer's office. This is disingenuous. A Walton paid lobbyist has been steadily pushing this program as a benefit for school choice.

Rep. Vivian Flowers said there was major confusion about how the program and it was "irresponsible" to take resources from public schools in the second poorest state in the country.

Here's the roll call. It doesn't reflect two sets of paired votes, listed here as not voting, which split 2-2. The key: A no from Republican Kim Hendren and a non-vote from Republican Rep. Joe Jett, a stalwart public education supporter as a Democrat but a committee leader under Gillam's leadership and generally in the speaker's camp. Good for Joe.

ALSO: The House today completed action on the Medicaid expansion budget with plenty of votes to spare. It was expected.

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May 16, 2017

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